OPINION, P8&9 COMPANIES, P7 EDITORIAL Repo hike slows FPI flows, hurts banks; CPI benign anyway COMPANIES, P6 NARENDRA MODI PERFORMANCE IN INDIA 25-YEAR PPAS Conservation integral to Indian culture, as Ujjwala, Swacch Bharat success shows PepsiCo reports double-digit organic revenue growth Masayoshi Son-led SoftBank offers free solar power to ISA members NEW DELHI, THURSDAY, OCTOBER 4, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.XLIV NO. 185, 16 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 35,975.63 ▼ 550.51 NIFTY: 10,858.25 ▼ 150.05 NIKKEI 225: 24,110.96 ▼ 159.66 HANG SENG: 27,091.26 ▼ 35.12 `/$: 73.34 ▼ 0.43 `/€: 84.66 ▼ 0.29 BRENT: $84.70 ▼ $0.10 GOLD: `30,997.00 ▲ `498.00 MARKETS ON WEDNESDAY Rupee crashes below 73, yields soar, Sensex tanks Continued on Page 2 72.91 73.05 8.112 7.988 8.105 73.34 73.20 8.070 73.35 8.041 8.035 73.50 (inverted scale) Open 8.000 Close `50,000croreintheDecember quarter even after `90,000 crore of OMO and `10,000 crore cut in the net borrowings by government in H2FY19. Banking system liquidity in recent weeks has been pressured by the RBI’s intervention in the forex market to stem the rupeedepreciation,economists said, as also a mismatch in the assets and liabilities of NBFCs andapick-upincreditdemand. Stocks sank as nervous Open Close investors took risk of the table anxiouscorporateprofitswould slow in a hugely over-valued market. The Sensex lost 551points to close below the 36,000 mark at 35,975.63. Morethan77%ofthestocksin a universe of companies with a marketcapitalisationof`1,000 crore or more have lost value sinceJanuary1.Foreignportfolio investors (FPI) are understood to have sold some $215 million worth of equities on Wednesday taking the sales sinceApril to $4.7 billion. While the combination of therupeeatbelow73levelsand bond yields at 8.1% should have been a mouth-watering one for foreign debt investors, currency market experts were unwilling to call a bottom for the Indian currency. Foreign funds sold $1.2 billion worth of bonds in September, taking the total sales since April to $7.3billion. Whilesomeofthedepreciationintherupeehastakenplace in sympathywith the fall in the values of other emerging market (EM) currencies, the sharp fall on Wednesday,when it lost 43 paise, has made the market jittery. Late in the evening, the RBI announced easier foreign currency borrowing norms for oilcompanies.However,during the daymarketswere confused by rumours the government and the RBI had agreed on a specialdollarwindowfortheoil marketing companies (OMCs). Meanwhile the bond markets are pricing in a 25 basis pointhikeinthereporatebythe central bank on Friday.The RBI has attempted to reassure the money markets by assuring them of liquidity.The RBI had on Monday morning announced `36,000 crore worth of open market operations but there are fears the defaults by some non-bank lenders could cause contagion. Down-trading FE BUREAU Govt’s telecom revenues under strain Q2 Q4 Q3 Q1 FY18 Q1 FY19 Q2 Q3 2,929 Q1 FY18 Q4 Q1 FY19 Spectrum usage charge (` cr) 1,309 1,256 1,152 1,051 1,028 Q2 Q3 Q4 Q1 FY19 Q1 FY18 Source: Trai REAPPOINTMENT AS MD Special Feature Why Indian languages are Google’s big focus From voice to video, there are more non-English users on the Indian internet today, than there are English users, says Google’s Rajan Anandan as he talks about the focus on regional content ■ eFE, P13 QuickPicks RBI announces liberalisation of policy for OMCs THE RBI on Wednesday announced liberalisation of policy for public sector oil-marketing companies (OMCs) in the case of external commercial borrowings (ECB) for working capital purposes, reports fe Bureau in Mumbai. Under the new provision, public sector OMCs can raise ECBs for working capital purposes with minimum average maturity period of three/five years from all recognised lenders under the automatic route. PAGE 2 Briton, two Americans win 2018 chemistry Nobel SCIENTISTS FRANCES Arnold, George Smith and Gregory Winter won the 2018 Nobel Prize for Chemistry for research using directed evolution to produce enzymes and antibodies for new chemicals and pharmaceuticals, the award-giving body said on Wednesday, reports Reuters. Arnold is only the fifth woman to win a chemistry Nobel. PAGE 14 FORCED BYMINORITY shareholders to reconsider the reappointmentofNeerajKanwar as managing director, Apollo Tyres said on Wednesday the board would back the reappointmentwhile seeking an independent assessment on the compensation. Minority shareholders had defeatedaspecialresolutionto extend Kanwar’s tenure beyond 2019, ostensibly unhappy with the very high compensation package, estimated by proxy advisory firm IIAS at around `65 crore. The company said the board will now seek shareholder guidance and independent opinion on Kanwar’s compensation. Kanwar is son of Onkar Singh Kanwarchairman and managing director. What has upset shareholders is that the increases in the remuneration have been steep at a time when the company has not been doing well. In 2017-18, for instance, when the company’s profits fell 34% to `724 crore, Neeraj Kanwar took home `44.6 crore,a 45% Director Designation Pay FY18 KM Mammen CMD JK Tyre Raghupati Singhania CMD 26.1 5.8 MD VC & MD MRF CEAT Anant Goenka Apollo Neeraj Kanwar Tyres `16,000-CRORE CLAIMS Stuck projects: ITNL claims exaggerated, say analysts ROAD TO RUIN A sample of ITNL's loss making roads portfolio Share in loss As % of ILFS' Debt due (` cr) of IL&FS (` cr) consolidated loss (As on Mar 31, 2018) Chenani Nashri Tunnelway 17.0 207 Moradabad Bareilly Expressway 150 124 ITNL MP Border Checkpost Development 171 ● CABINET NOD Apollo board to seek neutral view on Kanwar compensation FE BUREAU New Delhi, October 3 Prime Minister Narendra Modi greets new Chief Justice of India Ranjan Gogoi after he was administered the oath of office in New Delhi on Wednesday IL&FS TRANSPORTATION NETWORKS (ITNL) seems to have exaggerated the amounts it expects to receive from claims filed for its stuck road projects. On September 4, the company told shareholders at its annual general meeting (AGM) it has filed claims for `16,000 crore with the government. This amounts to a misrepresentationoffacts,analystsat one of the rating agencies FE spoke to said. This is because about two weeks earlier, on August 14, the company had told analysts on a conference License fee (` cr) 2,932 Adjusted gross revenue (` cr) First CJI from N-E takes charge ROUHAN SHARMA Mumbai, October 3 Down-trading in the pre-paid segment and re-pricing in the post-paid continue to take its toll on the earnings of telcos, hitting government’s revenue share earnings as licence fee and SUC 3,104 RELIANCE COMMUNICATIONS SAID on Wednesday it has got relief from the Telecom Disputes Settlement andAppellateTribunal(TDSAT) and can now complete its planned spectrum sale,whose proceeds will be used to make payments to Ericsson India and Reliance Infratel (RITL) minorityinvestors. RCom,in a regulatory filing to the BSE, said it will receive `975 crore from sale of spec- trum,and that it will pay Ericsson`550croreandRITLminority investors `230 crore from the spectrum trading proceeds. “Reliance Communications has been granted relief by the...Telecom Disputes Settlement and Appellate Tribunal (TDSAT) vide its interim order dated 1 October 2018, whereby...TDSAT has stayed the demand of bank guarantee of `2,900 crore by the Department of Telecommunications,” it said. Intra-day, Oct 3 (%) 8.140 Previous close Previous close 72.90 73.25 3,249 PRESS TRUST OF INDIA New Delhi, October 3 10-year bond yield Intra-day, Oct 3 3,261 Ericsson row: RCom says relief from TDSAT `/$ 36,552 ● SPECTRUM SALE Previous close 36,526.14 35,697 THE WORLD Federation of Exchanges (WFE), which represents nearly 45,000 listed companies, has appointed NSE's MD and CEO Vikram Limaye as the chairman of its working group committee, reports PTI. WFE, which is the global industry association for exchanges and clearing houses, also admitted six new members, taking the total number of full members to 70. Sensex 38,536 NSE’s Limaye gets WFE post Close Intra-day, October 3 TUSHAR GOENKA & UTSAV SAXENA Mumbai, October 3 THE RUPEE CRASHED to new lows on Wednesday, falling throughthe73marktocloseat 73.34 against the dollar. The currencymarketswerespooked byrisingcrudeoilprices,hovering around $85 per barrel that could exacerbate the twin deficitsproblem.India’scurrent account deficit (CAD) is now expected to widen to around $85billionin2018-19,upfrom $45 billion in 2017-18. With importers rushing to cover,the premium on three-month forward contracts jumped 3 basis points(bps)overMonday’sclose to around 4.5%,up from levels of 4.407% in earlyAugust. Meanwhile, bonds sold off sending the benchmark yield to 8.11% despite assurancesofadequateliquiditysupport from the Reserve Bank of India (RBI). Indranil Sengupta, economist, Bank of America, estimatestheliquiditydeficitinthe money markets will average 35,975.63 Open 41,669 GOLD SURGED by `555 to reach `32,030 per 10 gram at the bullion market on Wednesday, taking positive leads from global markets amid fresh buying by local jewellers, reports PTI. Silver too went past the `39,000 per kg mark on increased offtake by industrial units and coin makers. Traders said sentiment turned upbeat on positive global cues. 36,602.85 39,778 IN THE NEWS Gold tops `32,000 mark Importers rush to cover, driving up the three-month forward premium by 3 bps to 4.5% Source: IiAS increase over the remuneration earned in 2016-17. As IIAS has pointed out,the ratio of this remuneration to the median employee salary at the company was 940 times. Father and son together made `94.2 crore,which was 13.1% of the net profits. Neeraj Kanwar’s remuneration has risen sharplysince2013-14,whenhe received`14crore.Whilealarge portion of his salary is performance-linked, there is no absolute cap on the commissionupto5%ofthenetprofits. Over 56% of the institutional PAT FY18 21 1,130 25 65 70 80 3.9 8 240 33 44.6 45 720 35 MSP for rabi crops raised by 2-21% FE BUREAU New Delhi, October 3 investors of the tyre manufacturer and 49% of the retail shareholders voted against the resolution.The board of Apollo Tyres has several independent directorsincludingformerCAG Vinod Rai, Anjali Bansal, ShardulAmarchandMangaldas managing partner Pallavi Shroff, Shardul Amarchand MangaldasmanagingpartnerA Chudasama, retired IAS officer Vikram Mehta and former Indian Army chief Bikram Singh. THE CABINET COMMITTEE on Economic Affairs on Wednesdayincreasedtheminimumsupportprices(MSP)for rabi crops in the range of 221% for 2018-19 from last year’s level. This comes after five out of six crops were already more than 50% of theirA2+FL costs in 2017-18. Announcing the new Rabi MSPsofthe2018-19 cropyear (July-June), agriculture minister Radha Mohan Singh said wheat the price has been increased by `105 to `1,840 per quintal. It is 6% more thanlastyear’s`1,735/quintal and still 112.5% higher than its estimated cost of production (A2+FL) of `866/quintal. The benchmark rate of chana,whichwas already78% over the A2+FL cost in the last rabi season,has been raised by 5%to`4,620perquintal.Even for the current season, the price is 75% more than its cost of production of `2,637. Continued on Page 2 Continued on Page 2 (` crore) Change (%, y-o-y) 12.3 4,309 FE BUREAU New Delhi, October 3 2,009 10.2 New IL&FS board to meet today 37,000 call it has filed claims forabout `9,000 crore, of which it expected to receive about `3,500-4,500 crore. IL&FS, the parent of ITNL had, till September 29 defaulted on inter-corporate deposit payments and commercial paper to the tune of `3,761 crore. It was only after thedefaultstookplacethatthe company came out with a different numberto present itself inabetterlight,saidananalyst. A look at ITNL’s portfolio doesnotpresentarosypicture. The total losses on the roads portfolio is `585.81 crore, as on March 31,2018. THE NEW BOARD of debtladen Infrastructure Leasing & Financial Services (IL&FS) under Kotak Mahindra Bank managing director and CEO UdayKotakcouldmeetasearly asThursdaytotakestockofthe situationandprepareaninitial assessment of the crisis by October8,aseniorgovernment official said onWednesday. The board is expected to firm up a preliminary resolution plan in a fortnight, he added. Warning of action against anybody involved in wrongdoing, another official said the Serious Fraud Investigation Office (SFIO),which has already initiated a probe into theaffairsofIL&FSanditssubsidiaries, could file a tentative report on irregularities in around a month. Continued on Page 2 Continued on Page 2 14.1 Not shared AIR SICKNESS More Jet employees hit by salary default PRESS TRUST OF INDIA Mumbai, October 3 AFTER DELAYING SALARIES to its pilots and engineers along with senior management, Jet Airways has now defaulted on the payment of September’s salary to other categories of employees as well, an airline source said on Wednesday. The Mumbai-based fullservice airline,partiallyowned by the UAE’s national carrier Etihad Airways, has been facing financial problems for quite some now. The Naresh Goyal-controlled airline is struggling to mop up funds to meet its payment obligations, including salaries to its over 16,000strong workforce. “Wegenerallygetoursalary on the 1st of (every) month. Last month, the airline had paid to all employees except seniormanagement,pilotsand engineers on time. “But this time (September), they have failed to pay even to other categories of employees such as manager and above levels,”the source said. The source said the ■ Airline has defaulted on payment of September salary to employees other than pilots, engineers and senior management as well ■ Employees in A1-A5, O2 and O3 grades, or whose salaries are up to `75,000 per month, were paid on October 1 ■ Those in the M2, M3, E1 and above grades have not been paid yet employees in the A1-A5, O2 and O3 grades, or whose salaries are up to `75,000 per month, were paid on October 1,while the rest of the staffers in the M2, M3, E1 and above grades have not been paid yet. A query sent to Jet Airways on the issue did not elicit a written response. Continued on Page 2

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